Getting Barefoot With Michael Houlihan ’63
When Michael Houlihan ’63 and his partner Bonnie Harvey launched their Barefoot Cellars wine business in 1986, the pair was sorely lacking many things – most significantly knowledge of the wine industry and money.
But that didn’t stop the dynamic duo from building an award-winning national brand, eventually selling well over a half million cases annually in all 50 states and in 28 foreign countries.
What makes Houlihan’s story most intriguing, though, is how he and Harvey relied on “worthy cause marketing” instead of conventional advertising to grow a loyal following and promote their favorite causes.
“We were using social networking before the Internet,” Houlihan explains.
In a nutshell, Houlihan and Harvey spread the word about their wine by partnering with non-profits that believed in causes near and dear to them – such as environmentalism and civil rights. “Basically, we gave away wine at fundraising events, we worked festivals, we got out into the community and talked about causes we were passionate about and Barefoot wine in the same breath. It was very much a grassroots effort, and because we worked hard, had fun, and believed in what we were doing, it paid off,” Houlihan said.
Paid off it did. In 2005, Houlihan and Harvey sold the brand to E&J Gallo.
The pair’s incredible story is detailed in their soon-to-be released book “The Barefoot Spirit: How Hardship, Hustle, and Heart Built a Bestseller,” written with Sacramento Bee wine writer Rick Kushman.
A “sample tasting” is currently available at The Barefoot Spirit, in which you can read the book introduction and two chapters for free. Alternately, the entire book can be downloaded as an e-book, with the paperback shipped for free after the book is published, for $15.95.
“You’ll never look at a bottle of wine on the store shelf in the same way again. You’ll have so much more appreciation for how it got there,” Houlihan said.
Today, Houlihan works as a consultant and guest speaker/lecturer, sharing his stories of resourcefulness and ingenuity around brand creation, development and marketing concepts. He also co-authors two weekly business blogs about business principles, and leads webinars and seminars.
Out of Civil Service and Into Wine
After graduating from Long Beach State with a degree in political science, Houlihan worked as an assistant for influential Anaheim City Manager Keith Murdoch, who led the city’s transition from an agricultural community to one of the most important sports, convention, tourist and industrial markets in the United States.
“He’s the guy who got Disneyland and the California Angels ball club there” Houlihan said. “I got a great business education there.”
Houlihan subsequently returned to his native Bay Area to take a position as an administrative assistant for the Oakland Redevelopment Agency.
Soon, he began moonlighting after hours, helping businesses being forced to relocate formalize their policies and procedures. “They had to be able to survive in a new environment,” he said. “The best thing that they could do was have everything about the business documented.”
Eventually, Houlihan became frustrated with civil service work because it seemed to have a very limited future for him. “I had to wait for people to get promoted or take a job in another area,” he said.
So one day, with no other job on the horizon, Houlihan up and quit. “I didn’t just quit my job. I quit the idea of having a job,” he said. “Right then and there I committed myself to becoming an entrepreneur.”
Houlihan launched a consulting company focused on helping small and medium sized businesses – from startups to established ventures – with all aspects of their operations.
In 1983 he relocated to Sonoma County and began to gain clients who were in the wine business. He met Harvey, also a business consultant, at around the same time and their personal and professional relationship blossomed. In fact, it was Harvey who asked Houlihan to assist one of her clients, a grape grower, who was seeking payment from a winery that had just filed for bankruptcy.
“Sure enough, he was on the short end of the stick. It didn’t look like he was going to get paid,” Houlihan said.
So Houlihan negotiated a trade – bulk wine and bottling services instead of the money owed – with the thought of bottling some wine, selling it, paying the grape grower back and having a little money left over.
Building a Brand
Having the equivalent of 18,000 cases of wine was one thing. Knowing what to do with it was something else altogether.
So Houlihan sought out the wine buyer for a major grocery store chain to get some insight as to how to sell and market the wine. “He was a very gruff man and he didn’t have a lot of time for me,” Houlihan said.
His advice to “Make it a salt and pepper act, make it better than Bob and cheaper than Bob, and put it in a pig,” stumped Houlihan.
The translation from a friend in the industry proved invaluable: salt and pepper meant red and white wine; Bob referred to Robert Mondavi; and a pig is a magnum – a 1.5-liter bottle that is big and round like a pig.
With knowledge of the kind of product wine buyers were seeking, Houlihan and Harvey next focused on their label.
Another source had told them to stay away from names that included hill, leap, run, valley, creek, and especially chateau, and make the logo the same as the name – “something familiar that people will recognize and remember.”
Houlihan and Harvey bought the name “Barefoot” from an associate in the wine industry, and created a new logo and label based on an image of Harvey’s foot, then set out to make an approachable, affordable and accessible wine. “Wine was really snobby at that time. We wanted to go after people who were drinking beer,” Houlihan said. “Our slogan was ‘Get Barefoot and Have a Great Time’.”
Working out of the laundry room of their rented farmhouse, Houlihan and Harvey overcame seemingly insurmountable hurdles by employing their worthy cause marketing concept and utilizing “Barefooters” – merchandisers in every single market in the U.S. “They were responsible for keeping our product on the shelf in that market, and were charged with going into the neighborhoods and finding out what the worthy cause was that we could support to help with sales,” Houlihan said.
Today Houlihan advises young entrepreneurs to find non-profits that meld with their product. “If they are selling fishing poles, they should be supporting Wild Rivers because if Wild Rivers has its way the dams will go away and there will be more fish. Then there will be more reason for the fishing poles,” he said.
“We advise our clients today to consider what their company stands for – beside the mercantile product that they are producing – and to talk about that as much, or more, than the benefit of their product,” Houlihan said. “When people are loyal to you because they have a social reason to buy your product, you have customer retention that is much greater than you would get through any form of advertising.”
Houlihan says “The Barefoot Spirit” is not a prescriptive text. “It’s business adventure story in which you are a passenger on a roller coaster ride with Michael and Bonnie, while they go from the laundry room to the board room and build this best-selling brand while running into all kinds of challenges that they have to overcome,” he said. “It’s an uncommon, behind the scenes view of the wine industry.”
In today’s job market, the only form of employment for many college grads is self-employment, Houlihan says. “Jobs simply aren’t there and college graduates are not prepared for bootstrapping,” he said. “We want to give young people an opportunity to avoid some of the pain we went through. We’re giving them 19 years of head start on the real world. This is not stuff you’ll learn in school.”
And, most importantly, says Houlihan, young people need to understand that overnight success is a fallacy. “It’s a get rich slow scheme for most of us. That’s how business is in the real world,” he said.
For more information about Houlihan and worthy cause marketing visitwww.barefootwinefounders.com and www.thebrandauthority.net.